Italy's tourist industry is hoping that the new single currency will prompt a burst of intra-continental travel to pull it out of crisis provoked by the events of September 11th.

Long queues to get euros at banks

Cancelled tours, empty hotel rooms and near empty aircraft have led to appeals for government funding to avoid redundancies and businesses going under.

The Travel Agents Association says that some 2000 jobs have been lost out of a total of 35,000 employees and agency owners.

Teething problems

However the teething problems with the new currency in Italy, which has seen it at the bottom of the table for use of the euro in cash transactions, have not helped.

Delays in having euro emerging from automatic teller machines, bank strikes and the limited supplies of euro change ordered by retailers, have created initial difficulties.

Consumer defence groups have denounced widespread price rises, though the government and retailers associations say these claims are unjustified.

Psychological barrier

But industry experts are confident that with the new unfamiliar money jingling in their pockets, European visitors will holiday closer to home and learn to spend like the Americans.

Euro enthusiasm.. but no change in euros

"The arrival of the euro creates a single market of 300 million people who no longer have to overcome that psychological, not to mention financial, hurdle of changing currencies.

I have worked in our offices abroad and many of the requests for information were about exchange rates, currencies, whether it was better to take travellers cheques or cash," says Pier Giorgio Togni, director general of the Italian Tourism Office (ENIT).

To counter the decline in travel because of fears of terrorism, ENIT will be launching a major promotional campaign leaning heavily on Italy's cultural and artistic attractions.

However not everyone is so sure that the benefits of one European currency will play in Italy's favour.

Price comparisons

Adiconsum, a consumer watchdog, warns that Europeans and people from outside will now be able to assess clearly whether the three day package in Paris is a better deal than the one in Florence and Italy may not always come off best.

"Being able to compare prices will not only empower the traveller, but we hope it will stimulate competition," said Adiconsum director general Paolo Landi.

"It may even be an incentive to operators to lower their prices slightly. That could also compensate in some ways for the risk that rounding up leads to hidden prices rises," added Mr Landi.

Many Italian businesses signed a pact not to alter their price lists to avoid inflation but Italy's four main consumer groups have denounced widespread price hikes and are asking for a tax rebate of 100,000 lire per family to compensate.

They say the public bodies have failed to set an example with the Milan Transport Board raising the price of a tram or metro ticket from 1500 lire to one euro (1936.27 lire).

Entrance fees to popular museums and monuments, such as the Uffizi Gallery in Florence and the Galleria Borghese and archaeological sites in Rome, have also increased.

The most obvious losers have been the change bureaux.

The major operators, such as Thomas Cook, for whom money changing is just a segment of their overall travel offer can compensate but smaller independent operators will face tough times.

Many change offices in border posts such as Ventimiglia or Domodossola say they risk ruin.